Sign in

You're signed outSign in or to get full access.

NS

NATURES SUNSHINE PRODUCTS INC (NATR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record quarterly net sales of $118.2M, up 8.5% year-over-year (10% constant currency), though GAAP diluted EPS was a loss of $0.02 driven by FX losses and tax timing; adjusted EBITDA rose 6% to $10.3M .
  • Asia Pacific led growth (+21% local currency) with strong performance in Taiwan (+29%), Japan (+27%), and Korea (+21%); Europe grew ~8% local currency; North America digital sales grew 17% YoY, while total NA declined 1.6% .
  • FY25 guidance introduced: net sales $445–$470M (includes ~$5M FX headwind), adjusted EBITDA $38–$44M; CFO expects gross margin modestly higher and quarterly SG&A “slightly more than $40M,” reflecting a conservative stance given tariffs and macro uncertainty .
  • Potential stock reaction catalysts: record sales but GAAP loss on FX/taxes, conservative FY25 guide with tariff risks modeled at a $2–$3M gross margin impact if enacted for the full year, and an AI-enabled distributor toolkit slated for late Q3/early Q4 2025 .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue and largest single quarter in company history; adjusted EBITDA increased 6% YoY to $10.3M, supported by strong execution in APAC and Europe .
  • APAC momentum from rebalanced consumer proposition and field incentives, with Taiwan (+29%), Japan (+27%), and Korea (+21%) driving local-currency growth; China stabilized to modest growth in Q4 .
  • North America digital continued to scale: Subscribe & Thrive autoship ~26% of NA sales; digital sales +17% YoY in Q4 and +22% for FY24, outpacing industry growth .

What Went Wrong

  • GAAP net loss to common shareholders of $(0.3)M and diluted EPS of $(0.02), reflecting $(3.1)M other loss on FX and a $2.2M tax provision versus a prior-year tax benefit; operating margin compressed to 3.8% from 5.2% YoY .
  • SG&A rose to $43.7M (37.0% of sales) due to variable costs and one-time initiative costs, offsetting gross margin gains from cost savings; volume incentives as % of sales also rose (31.1%) on market mix .
  • S&P Global consensus estimates were unavailable at time of writing, limiting assessment of beats/misses versus Street [GetEstimates error].

Financial Results

Quarterly Performance vs Prior Periods and Year-Ago

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Millions)$110.6 $114.6 $118.2
Gross Margin %71.4% 71.3% 72.0%
Volume Incentives % of Sales31.4% 31.0% 31.1%
SG&A ($USD Millions)$38.6 $41.0 $43.7
SG&A % of Sales34.9% 35.7% 37.0%
Operating Income ($USD Millions)$5.6 $5.3 $4.6
Other Income (Loss), net ($USD Millions)$(1.2) $2.6 $(3.1)
Provision for Income Taxes ($USD Millions)$2.9 $3.3 $2.2
GAAP Diluted EPS ($USD)$0.07 $0.23 $(0.02)
Non-GAAP Diluted EPS ($USD)$0.07 $0.27 $0.00
Adjusted EBITDA ($USD Millions)$10.4 $10.7 $10.3

Segment Net Sales ($USD Millions)

SegmentQ2 2024Q3 2024Q4 2024
Asia$49.984 $55.293 $56.297
Europe$21.602 $19.615 $21.324
North America$33.563 $33.631 $35.130
Latin America & Other$5.402 $6.076 $5.454
Total$110.551 $114.615 $118.205

KPIs and Balance Sheet Highlights

KPIQ3 2024Q4 2024
Cash & Equivalents ($USD Millions)$78.7 $84.7
Inventory ($USD Millions)$62.298 $59.4
Net Cash from Ops$13.1M (9M) $25.3M (FY)
Share Repurchase509k shares; $8.4M; $16.56 avg (YTD) 540k shares; $8.9M; $16.42 avg (FY)
NA Digital Sales Growth+17% YoY (Q4) +22% YoY (FY)
Subscribe & Thrive Autoship~26% of NA sales (FY) ~26% of NA sales (FY)

Estimates vs Actual (Q4 2024)

MetricConsensus (S&P Global)ActualSurprise
RevenueUnavailable$118.2M N/A
Diluted EPSUnavailable$(0.02) N/A
Adjusted EBITDAUnavailable$10.3M N/A

Note: S&P Global consensus data for Q4 2024 were unavailable at the time of writing due to request limits.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY2024$436–$445M (Q2) $443–$448M (Q3 update) Raised (vs Q2)
Adjusted EBITDAFY2024$39–$42M (Q2) $40–$42M (Q3 update) Raised (midpoint)
Net SalesFY2025N/A$445–$470M (incl. ~$5M FX headwind) New
Adjusted EBITDAFY2025N/A$38–$44M New
Gross MarginFY2025N/AModestly higher YoY (qualitative) New (qualitative)
SG&AFY2025N/AQuarterly “slightly more than $40M” New (quantitative run-rate)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/digital enablementUpgraded NA digital platform; actions to improve capabilities Digital sales strength; continued progress Launching AI-powered distributor toolkit late Q3/early Q4 2025 to enhance CRM and outreach Increasing emphasis on AI-driven sales tools
Supply chain & tariffsInflation/FX headwinds; streamlining SG&A; no tariff quantification Monitoring macro; FX gains in Asia offset losses Tariffs modeled at $2–$3M gross margin impact if enacted for full year; preventative measures in place Risk escalating; quantified in outlook
Product performance (Power Line)Not highlightedStrong adoption in Central Europe; double-digit growth in Baltics Continued strength in Central Europe; robust field execution Sustained positive momentum
APAC strategy & trajectoryRebalanced consumer proposition and packs to drive repeat purchases Robust customer growth in Japan/Taiwan; Korea progress; China headwinds APAC +21% local-currency; Taiwan +29%, Japan +27%, Korea +21%; China modestly up Strengthening with broader market contributions
Macro uncertaintyUS consumer slowing; China macro headwinds Ongoing headwinds in China Guarded near-term outlook; uncertainty on tariffs, FX, consumer spending Persistent caution

Management Commentary

  • “In terms of revenues at $120 million, the fourth quarter represents the largest single quarter in the company's 52-year history” — Terrence Moorehead, CEO .
  • “Powered by AI decision-making, the new tools are designed to extend our digital reach and improve the effectiveness of our nutritional health practitioners, specialty retailers, and affiliates” .
  • “Overall, digital sales were up 17% in the fourth quarter and increased 22% for the full year… Subscribe & Thrive autoship program… about 26% of sales” .
  • “Our outlook remains guarded as we face significant uncertainty related to the geopolitical and macroeconomic environment, cost dynamics and consumer spending” .

Q&A Highlights

  • APAC growth drivers: merchandising/bundles, Subscribe & Thrive, and field incentives drove customer acquisition and repeat purchases; management expects robust growth but not sustained 20%+ rates .
  • Tariffs: Modeled $2–$3M gross margin impact if proposed plus retaliatory tariffs enacted for the full year; measures include extended supplier contracts and inventory buffers; retaliatory tariff impacts outside Asia remain uncertain .
  • Production/purchasing footprint: ~80% of what the company produces is in the U.S.; ~60% of purchases are U.S.-sourced, clarifying supply exposure .
  • Regional details: China moved from >20% decline (Q3) to slight growth (Q4); Korea sequential inflection from flat (Q3) to +21% (Q4), with sustainable growth expected but at lower rates; Central/Eastern Europe growth led by Poland, Baltics, Slovenia, Slovakia .
  • Digital mix: NA digital ~25% of NA revenue; China is essentially 100% digital via live streaming; hybrid digital activation globally .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable at the time of writing due to request limits, so beats/misses versus Street could not be assessed [GetEstimates error].
  • Given strong reported revenue growth and FX/tax-driven GAAP loss, Street revisions may focus on FY25 margin trajectory, tariff pass-through, and SG&A run-rate, contingent on macro developments .

Key Takeaways for Investors

  • Fourth-quarter revenue strength was broad-based, led by APAC and Europe; however, GAAP EPS swung negative on FX losses and tax timing despite cost-savings supporting gross margin — watch FX volatility and tax normalization into FY25 .
  • FY25 guide is conservative (net sales $445–$470M; adjusted EBITDA $38–$44M) with explicit FX and tariff headwinds; monitor policy outcomes and potential pricing/efficiency offsets .
  • AI-enabled distributor toolkit (late Q3/early Q4 2025) could be a medium-term catalyst for customer acquisition/retention and digital attribution; adoption curve and training will shape ROI .
  • APAC trajectory remains the key growth engine; sustainability at moderated rates is likely, with particular strength in Taiwan/Japan, while China stabilization is encouraging but still fragile .
  • Balance sheet flexibility (cash $84.7M, no debt) supports continued digital transformation and shareholder returns (540k shares repurchased at ~$16.42 in FY24) .
  • Near-term trading setup: record sales vs GAAP loss and cautious FY25 outlook could heighten sensitivity to FX prints, tariff headlines, and NA consumer health; watch quarterly SG&A (> $40M) and gross margin cadence for execution signals .
  • Medium-term thesis: execution on AI/digital tools, continued APAC/Europe growth, and cost discipline underpin margin resilience; tariff mitigation and FX management are critical for EPS normalization .